Hurtling Towards A Cashless Economy

Stephen Glover writes:

Estimates vary but it’s widely predicted that Britain is well on the way to becoming a cashless society, and could reach that state within ten to 15 years. Has the public been consulted? No. Is the Government showing signs of concern about the millions of people who would struggle to cope with a cashless society? Not that I’ve noticed. 

Most of us will have experienced how increasingly difficult it is even to get access to one’s own money. First of all came the bank closures. A staggering 3,303 branches in the UK put up their shutters between January 2015 and August 2019 — equivalent to 34 per cent of all the banks in the country. 

Last week, Money Mail carried a harrowing story of the disastrous effect of closures on local businesses in St Ives in Cornwall. The seaside town has lost seven banks since 2015, and the sole surviving one may be for the chop. 

And as that process continues apace nationwide, the banks are decreasing their financial support for the network that administers cash machines. Between January 2018 and December 2019, the number of free-to-use machines fell from 54,500 to 45,000. 

More and more ATMs charge up to £2 per transaction. As a result, fees paid by the public to withdraw their own cash have risen from £29 million to £104 million a year. In my bailiwick of Oxford — hardly the back of beyond — the four cash machines closest to my house have all closed in recent years, so that a car or bus journey is now obligatory in search of bank notes.

According to the consumer group Which?, the remaining network of free cash machines faces collapse within two years unless the Government forces banks to maintain the system. Isn’t it clear that, whether we like it or not, the banks are deliberately pushing us towards a cashless society by making it so hard for us to use cash? 

What’s in it for them are greater profits. They want us to use bank cards or smartphone apps such as Apple Pay wherever possible because it saves them the expense and time of counting and handling cash, and the cost of transporting the stuff. Banks and companies such as Visa and Mastercard also make billions worldwide in fees — typically paid by the retailer — for processing electronic payments.

The big retailers also far prefer cards to cash. Whenever we use a piece of plastic, there is a record of our purchase. The data can be used by the shop, or sold on so that other retailers can target us with advertising for similar products.

As for the Government, it likes cards because, unlike cash, their usage is theoretically traceable. They are supposed to reduce crime, and cut tax evasion in the black economy. In fact, these benefits could well be outweighed by the explosion in online fraud. 

This, then, is where we are — hurtling towards a cashless economy without any questions being asked. 

I don’t say it is all bad. Cards can obviously be more convenient. Like most people, I prefer to use them rather than cash for large payments. I can also see that ‘contactless’ cards for purchases up to £30 can be handy if your wallet is empty. Introduced in 2007, they now account for a fifth of all payment transactions, according to government figures.

It is also true that some young people live most of their lives without ever using money, though I can’t help wondering whether their unfamiliarity with it may undermine their sense of what it is really worth. 

So I’m no Luddite. Plastic is not always bad. But I’ve no doubt there are many millions of people like me who don’t want to be deprived of their cash by avaricious banks and sly retailers, aided and abetted by the Treasury. As recently as 2017, research by retail analysts Mintel suggested that only 33 per cent of adults are in favour of a cashless society. Among those over 55, that figure fell to 20 per cent.

What’s wrong with cash? Whenever you spend it, you are not being tracked by Big Brother. There is a marvellous sense of freedom and security simply in having it. You’re not a statistic on someone else’s screen. It’s yours. You can put a coin in a beggar’s hat, or give £5 on a whim to a favourite grandchild, or drop a note into the church collection (though some parishes are, almost unbelievably, introducing card readers).

It is also undoubtedly the case that many people, most of them quite old, simply can’t manage (or don’t want to) the challenges of contactless cards or Apple Pay. Why on earth should they? A report last year by a body called Access To Cash Review speculated that there are eight million adults who would struggle to cope in a world without cash. That is an awful lot of people.

I don’t think I’m particularly technophobic, but I am driven half-mad when I find myself, say in Central London, required to pay a parking charge on the street via a smartphone rather than with old-fashioned coins. Why should it be assumed that everyone has a mobile? What happens if one has left it at home? The business of texting or telephoning is about ten times more drawn-out than inserting coins, but of course it suits the council in question.

Nor will I be hurrying to Tesco’s first cashless store on High Holborn in London, which opened on Tuesday. Is this really the way to treat customers who would prefer to use good old bank notes? I find it quite irritating enough to be made to use a card on a British Airways flight in Europe to buy food and drink — which incidentally used to be free.

Conspiracy is a much overused word, but it’s hard not to see a kind of orchestrated attempt by banks and shops to force us to change our established way of doing things to make life simpler — and more profitable — for them.

We’ve seen quite enough of banks’ misbehaviour over the past couple of decades — from the duplicity of PPI to the scandal of dodgy mortgages before the 2008 financial crash — to realise they are not going to do the decent thing voluntarily. The Government (and this means the new Chancellor, Rishi Sunak) must force banks to maintain the failing system of cash machines so that it does not become a major challenge for people to get their hands on their own money.

And although preventing banks endlessly closing branches may not be possible, the Treasury cannot simply stand aside while small communities are deprived of these crucial financial institutions on which they so depend.

Not all of us are tech-savvy, sleek, youthful, metropolitan types with agile fingers dancing effortlessly over smartphones, distributing money and settling bills in a flash. Millions of us value banks (ideally staffed with competent humans, not machines) and would like to be able to draw out, and spend, our own hard-earned cash.

Does Boris Johnson’s Government, with its eye supposedly fixed on ordinary folk far beyond the capital, realise that we don’t want to be bamboozled by banks into a cashless society?